In Nagpur, a leading legal expert has issued a stark warning to housing society members and property owners, urging them to proceed with extreme caution when embarking on redevelopment projects. Senior advocate Sandip Shastri stressed that a single wrong decision in choosing a developer can spiral into years of legal battles, financial losses, and structural nightmares.
The Critical Parameters for Developer Selection
Speaking at a special awareness session organized by the Akhil Bharatiya Brahman Mahasangh, Shastri acknowledged that redevelopment is becoming a common solution for aging buildings. However, he emphasized that this process demands rigorous due diligence and informed, collective decision-making from all society members.
He advised societies to move beyond emotional appeals and evaluate proposals with cold, objective clarity. Shastri highlighted three non-negotiable parameters for selecting a developer:
- The builder's proven track record of successfully completed projects.
- The financial solvency of the developer to ensure they can weather project delays.
- The "pocket-first" rule, which mandates that the developer must have sufficient upfront capital to fund construction without relying exclusively on the sale of new flats.
Legal Mandates and Regulatory Safeguards
For cooperative housing societies, Shastri clarified the legal threshold for such major decisions. Approval from at least 51% of the general body is mandatory both for initiating the redevelopment process and for finalizing the choice of developer. This rule is part of the state government's revised 2019 Standard Operating Procedure (SOP), which introduced stricter conditions to protect residents.
One key safeguard in the 2019 SOP is the requirement for developers to provide mandatory bank guarantees—a condition that Shastri noted is often resisted by builders but is crucial for society's security. He also urged members to personally verify whether shortlisted developers have a history of securing Occupancy Certificates (OCs) for flat owners in their past projects.
While compliance with the Maharashtra Real Estate Regulatory Authority (MahaRERA) is compulsory for larger projects, Shastri pointed out that some projects outside RERA's jurisdiction have bypassed norms. "However, recent crackdowns by the sub-registrar's office have exposed such irregularities," he stated, underscoring the need for vigilance.
The Rising Tide of Redevelopment in Maharashtra
Shastri traced the evolution of redevelopment in the state, noting that activity was limited until 2020. The landscape transformed significantly with the introduction of the Unified Development Control and Promotion Regulations (UDCPR), which increased the permissible Floor Space Index (FSI) and launched new redevelopment schemes.
"Since December 2020, awareness has grown, prompting many old apartment schemes to opt for redevelopment," he explained. He also clarified that while the central RERA Act was established in 2016, in Maharashtra, only large plots fall under MahaRERA's purview, leading to some resistance from stakeholders.
The driving forces behind this redevelopment wave are multifaceted. Shastri listed deteriorating structural stability in old buildings, outdated amenities, skyrocketing maintenance costs, and non-compliance with modern safety standards as primary reasons. Inefficient land use and the growing space needs of expanding families add to the pressure. Furthermore, residents' reluctance to bear ever-increasing maintenance charges is accelerating the decision to redevelop.
In conclusion, Shastri's core message was one of cautious optimism. While redevelopment offers a powerful solution for urban renewal, its overall viability—including realistic timelines and a sound funding structure—must be assessed with eyes wide open to prevent future distress.
